Instructions For Form 541-Qft - California Income Tax Return For Qualified Funeral Trusts (Qfts) - 2010
ADVERTISEMENT
1
2
3
42010 Instructions for Form 541-QFT
California Income Tax Return for Qualified Funeral Trusts (QFTs)
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2009, and to the California Revenue and Taxation Code (R&TC).
What’s New
Funeral Trusts, to file for a single QFT or
beneficiary’s share of the trust’s income is
for multiple QFTs having the same trustee,
determined in accordance with the beneficiary’s
Contribution Limits
following the rules discussed under General
interest in the trust . A beneficiary’s interest in a
For taxable years beginning on or after
Information C, Composite Tax Return .
trust may be determined under any reasonable
January 1, 2010, California conforms to the
method .
An election to file as a QFT for federal purposes
federal law which repealed contribution limits .
is considered an election for California
Whenever these instructions refer to a trust or
Qualified Funeral Trusts (QFTs) are no longer
purposes . A separate election is not allowed .
QFT, it includes such separate interests that are
limited to a defined contribution amount .
treated as separate QFTs .
Trustees must use Form 541-QFT to:
General Information
• Report income received by a QFT .
C Composite Tax Return
In general, for taxable years beginning on or
• Report income that is either accumulated or
A trustee may file a composite Form 541-QFT
after January 1, 2010, California law conforms
distributed currently to the beneficiaries .
for all QFTs of which he or she is the trustee
to the Internal Revenue Code (IRC) as of
• Report any applicable tax liability of the
including QFTs that have short taxable years .
January 1, 2009 . However, there are continuing
fiduciary .
Get federal Form 1041-QFT, U .S . Income Tax
differences between California and federal law .
• File an amended tax return for the QFT .
Return for Qualified Funeral Trusts, for more
When California conforms to federal tax law
Pre-need funeral trusts that do not qualify as
information .
changes, we do not always adopt all of the
QFTs should get the instructions for Form 541,
changes made at the federal level . For more
California Fiduciary Income Tax Return, for
D When to File
information, go to ftb.ca.gov and search for
their filing requirements .
conformity .
For calendar year estates and trusts, file
For tax purposes, a trust will generally be
Form 541-QFT by April 15, 2011 . The due date
The instructions provided with California tax
regarded as a separate entity . However, if
for a composite tax return is also April 15,
forms are a summary of California tax law
there is an unlawful shifting of income from
2011, even if the tax return includes QFTs that
and are only intended to aid taxpayers in
the individual who has earned that income to
terminated during the year .
preparing their state income tax returns . We
a trust, the trust will no longer be treated as
include information that is most useful to the
Due to the federal Emancipation Day holiday on
a separate entity and the income will be taxed
greatest number of taxpayers in the limited
April 15, 2011, tax returns or payments due by
to the individual who earned the income . If
space available . It is not possible to include
this date, and received on April 18, 2011, will
the individual who established the trust has a
all requirements of the California Revenue
be considered timely .
substantial ability to control the assets, all of the
and Taxation Code (R&TC) in the tax booklets .
income will be taxed to that individual . Unless
If the QFT needs an extension of time to file
Taxpayers should not consider the tax booklets
specifically allowed by the California R&TC and
and owes an unpaid tax liability, get form
as authoritative law .
the IRC, deduction of personal living expenses
FTB 3563, Payment for Automatic Extension
Internet Access
by an individual or trust is not allowed .
for Fiduciaries . If you are filing for a short
You can download, view, and print California
taxable year, file Form 541-QFT by the 15th day
B Qualified Funeral Trust
tax forms and publications at ftb.ca.gov .
of the 4th month following the close of the
short taxable year . The QFT has an additional
Access other state agencies’ websites at ca.gov .
A QFT is a domestic trust that meets all of the
six months to file without filing a written
following requirements:
Installment Payments
request for extension . However, to avoid late
Installments due shall be thirty percent of
• Arises as a result of a contract with a
payment penalties, 100% of the tax liability
the required annual payment for the 1st
person engaged in the trade or business
must be paid by the original due date of the tax
required installment, forty percent of the
of providing funeral or burial services or
return .
required annual payment for the 2nd required
property to provide such services .
If the QFT does not file the tax return by the
installment, no installment is due for the 3rd
• The sole purpose of the trust is to hold,
extended due date, we will impose late filing
required installment and thirty percent of the
invest, and reinvest funds in the trust and to
penalties and interest on any tax due from the
required annual payment for the 4th required
use those funds solely to pay for funeral or
original due date of the tax return .
installment .
burial services or property to provide such
services for the benefit of the beneficiaries
QFTs with a tax liability less than $500 do not
E Where to File
of the trust .
need to make installment payments .
• The only beneficiaries are individuals for
If an amount is due with the tax return, mail
QFTs with an adjusted gross income equal to
whom such services or property are to be
the tax return and payment to:
or greater than $1,000,000 must compute the
provided at their death under the contracts
FRANCHISE TAX BOARD
annual estimated tax requirement based on
described above .
PO BOX 942867
the current year income . Get Form 541-ES,
• The only contributions to the trust are made
SACRAMENTO CA 94267-0001
Estimated Tax for Fiduciaries, for more
by or for the beneficiaries’ benefit .
information .
Using black or blue ink, make the check or
• The trustee makes the election to treat the
money order payable to the “Franchise Tax
Third Party Designee
trust as a QFT .
Board .” Write the QFT’s federal employer
The trustee can designate a third party to
• If the QFT election had not been made, the
identification number (FEIN) and “2010
discuss the tax return with the Franchise
trust would have been treated as owned by
541-QFT” on the check or money order . Do not
Tax Board (FTB) . For more information, see
the purchasers of the contracts under the
mail cash .
General Information G, Who Must Sign .
grantor trust provisions of the IRC .
All checks or money orders must be payable in
A Purpose
If a QFT has multiple beneficiaries, each
U .S . dollars and drawn against a U .S . financial
beneficiary’s separate interest under a contract
The trustee of a trust that has elected to
institution .
is treated as a separate QFT for the purpose of
be taxed as a QFT can use Form 541-QFT,
figuring the tax and filing this tax return . Each
California Income Tax Return for Qualified
Form 541-QFT Instructions 2010 Page 1
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial